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Smaller Internet Providers Up To Speed - Telstra v Optus

Article No. 625 - March 27, 2007

Click here to view customer profiles of specific Internet Service Providers

When comparing Internet Service Providers (ISPs) in Australia, WestNet and Chariot customers are the most satisfied with their ISP, according to the latest Roy Morgan Research Single Source survey of more than 24,000 Australians aged 14 and over.

WestNet and Chariot customers most satisfied

Westnet and Chariot recorded the highest satisfaction ratings with 81.5% and 80% respectively saying their provider “exceeded” or “mostly met” their expectations in 2006.

Dodo (63%) and iPrimus (65.5%) had the lowest proportion of customers saying they “exceeded” or “mostly met” their expectations in 2006.

Of all Internet users, 70.5% say their provider “exceeded” or “mostly met” their expectations in 2006.

TPG and Austarnet biggest improvers in customer satisfaction

TPG Internet, who is acquiring a controlling stake in Chariot, recorded the largest increase in satisfaction, up 7.3% to 73.5% over the past year. AustarNET (up 6.3% to 76%) also improved during the past year, whilst the largest decline was for iinet (down 9.1% to 66.5%).

David Laffin, Roy Morgan Research Telecommunications Industry Director, says:

“Customers tend to be more satisfied with and more loyal towards ISPs who they consider prompt, friendly and efficient with competitive pricing.

“It seems that word of mouth is strong: ISPs rated highly by their customers tend to be increasing their market share, whilst those ranked poorly tend to be losing share.”

Analysis by States


• The highest satisfaction level for any brand in any state was recorded by Westnet in Victoria — 92% of customers said their expectations were “exceeded” or “mostly met”.

• Despite a high level of satisfaction nationally (80%), Chariot recorded inconsistent results across states — it had relatively low satisfaction levels in Queensland (47.5%), but among the highest levels in NSW, Victoria and South Australia.

Telstra BigPond and OPTUSnet recorded similar levels of satisfaction in NSW and Queensland, however, a higher proportion of OPTUSnet customers in Victoria and Tasmania were satisfied than their Telstra BigPond counterparts. In South Australia and Western Australia, a higher proportion of Telstra BigPond customers were satisfied.

Telstra BigPond and OPTUSnet customers report average satisfaction levels

• 70.5% of OPTUSnet customers and 69.5% of Telstra BigPond customers say their ISP “exceeded” or “mostly met” their expectations during 2006.

Telstra BigPond recorded lower levels of satisfaction than OPTUSnet from 2001 through to 2005. From late 2004, Telstra BigPond has steadily improved and for a period during 2006 it recorded higher satisfaction levels than OPTUSnet.

Satisfied ISP customers are more loyal

• It is little surprise that ISPs with the highest satisfaction ratings tend to have lower proportions of their customers intending to switch providers. Westnet and Chariot both recorded “intention to switch” levels of 11%.

• At the other end of the scale, iPrimus (21%) and dodo (20%) have a relatively high proportion of their customers “very” or “fairly likely” to switch.

• Similar switching intention levels were recorded for Telstra BigPond (14.5% “very” or “fairly likely” to switch in the 12 months to December 2006) and OPTUSnet (14%). Both results are around the average level (15.5%).

Intention to switch: State analysis

Dodo (NSW and Victoria), iinet (Queensland and SA), and iPrimus (Victoria, SA and WA) recorded high proportions of their customers intending to switch — at least one-in-five.

• Less than one-in-ten Westnet customers (in Victoria and Queensland) and Chariot customers in Queensland and SA intend to switch.

Satisfaction and Loyalty linked to Enthusiasm, Prompt and Efficient Service and Pricing

ISPs with the highest satisfaction ratings and lower customer switching intention received above average ratings from their customers on attributes such as:


o Enthusiasm and Friendliness;


o Prompt and Efficient Service; and


o Competitive Pricing.

OPTUSnet customers more likely than Telstra BigPond to rank their ISP higher on competitive prices and incentives for bundling

• Whilst Telstra BigPond and OPTUSnet received similar ratings from their customers on the extent to which they were prompt, efficient, friendly, and provided a reliable supply, only 19% of Telstra BigPond customers considered the company to have “competitive prices” compared to 24.5% of OPTUSnet customers.

OPTUSnet recorded the highest proportion of customers (23.5%) that consider their ISP to “offer worthwhile rewards/incentives for packaging two or more services together” (compared to 20% for Telstra BigPond and 16.5% overall).

Westnet ratings well above average

Westnet consistently scored the highest ratings from its customers:

o 48% consider the ISP to provide prompt service (compared to 30.5% overall);


o 34.5% consider the ISP to be customer focused (compared to 17.5% overall);


o 33.5% consider the ISP to be enthusiastic and friendly (compared to 15% overall); and


o 23.5% consider the ISP to take responsibility (compared to 10.5% overall).

Further analysis of Roy Morgan Single Source data reveals current levels as well as longer term trends of:

• How much time and money consumers spend each month accessing the Internet;

• Where and when consumers access the Internet;

• What consumers currently use the Internet for (including the value and detail of purchases made);

• What consumers intend to use the Internet for in the future; and

• Consumers’ attitudes to the Internet.

 

For further information:

David Laffin:           Office: (03) 9224 5341    Mobile: 0421 619 117     Email: David.Laffin@roymorgan.com


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